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Does working as a locum tenens physician pay off?


Explore factors that determine how locum tenens physicians pay rate and non-salary offerings are calculated-and whether that adds up to an attractive gig.

Regardless of the medical specialty, most permanent physician jobs are paid in a similar way-annual salary, health benefits, and some sort of retirement plan. Compensation works a bit differently for locum tenens physicians.

Unlike a more traditional salaried job, locums are independent contractors and are usually paid a flat hourly rate for the time they work, whether it’s a weekend shift in an emergency department or a six-month stint as a hospitalist.

Locum tenens physicians are usually paid directly by the locum tenens placement company. Payment rates vary depending on a number of factors, such as:

  • Demand for the specialty – Locum tenens jobs are available in more than 100 specialties. Facilities are willing to pay more for specialties that are competitive or difficult to fill. Though the demand is facility specific, there is an ongoing need for internal medicine physicians, hospitalists, psychiatrists, nurse practitioners, and physician assistants-just to name a few.
  • Location and type of facility – There are open locum tenens positions all across the country. Generally, rural facilities or those having trouble attracting permanent candidates will pay more than facilities in popular urban locations.
  • Skill set and patient load – Positions that include difficult procedures or require specialized skills often pay more than general assignments. Patient load also plays a role in pay-slower-paced assignments tend to pay less than high workload positions.
  • Type of shifts needed – Assignments can last just a few shifts, a weekend, or months at a time. Working weekends, call, or holidays may result in a higher hourly locum tenens pay rate for those types of shifts.

Combined, all of these factors determine hourly pay rate, which may result in a locum tenens orthopedic surgeon making substantially more in a rural hospital in North Dakota than in Los Angeles.

It’s worth noting that because locums physicians are independent contractors who do not receive traditional benefits, they are usually paid a higher hourly rate than their permanent counterparts. A locums physician could conceivably make between $20 and $50 more per hour than a permanent doctor in the same facility.

There are other non-salary compensation considerations, too. These are the other costs associated with working locum tenens-medical malpractice insurance; licensing, credentialing and privileging; and travel and housing-that will typically be covered by the locums agency. Working with an agency alleviates much of the extra work that taking locum tenens assignments may create. Larger locum tenens companies often have in-house teams to help gather and maintain the necessary paperwork for temporary assignments. They may also know how to navigate the licensing, credentialing, and privileging processes in different facilities and states. Thanks to the recent efforts by the Interstate Medical Licensure Compact, it’s now faster to get a license in more than 20 states across the country.

Locum tenens work also has tax benefits. Most locums physicians will, depending on the state in which they live, set up a limited liability company (LLC) or other incorporated entity. This creates additional write-off options and other ways to save on their taxes. It’s important to note that working locum tenens does make your tax situation a little more complex since it can necessitate paying taxes in multiple states and may require paying your taxes quarterly, so check with a local tax adviser to review the best options for your specific situation.

Whether locum tenens is your full-time job or something you do on the side, it can be a lucrative way to work as a physician. If you’re curious about how much you could earn, check out the salary calculator at locumstory.com.

Lisa Grabl is president of CompHealth, the nation’s largest provider of locum tenens physicians and founder of the traveling physician industry. Lisa joined CompHealth in 2001 as a sales consultant and excelled in a variety of management roles prior to being named president in 2017. Lisa is passionate about building lasting relationships and helping her team members reach their highest potential..

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